What makes high growth entrepreneurs tick?

14/10/2013

The past 18 months has provided some amazing insight into how the high growth entrepreneurial mind ticks. As a leader of a high growth company and coach to a number of ambitious individuals, the secrets of what they do are becoming clearer and clearer. There is no one killer action or strategy! Their internal machine is similar to a Rolls Royce jet engine – there are many parts, which contribute to the thrust and power of keeping a plane airborne. However, my own observational research is unearthing a number of common ingredients that help them achieve profitable growth. Here are some of my recent observations of how these ambitious wealth creators go about their work:

They have obsessive ambition to reach their goals. Very often these are anchored by an inner desire to achieve a burning personal intention, this may include supporting family needs, creating financial freedom or wanting to be recognized for what they set out to do. These hard-wired drivers become an inner force for making things happen. A vision becomes real when an entrepreneur knows very clearly what they want from life and what they need to do to support their loved ones. (Unfortunately many entrepreneurs are unable to find clarity – the consequence is more pedestrian growth)

High growth entrepreneurs have a deep belief that they can achieve what they set out to deliver. Whilst they have faith in their capability, very often paranoia surrounding failing becomes a turbo charger for making the right decisions and getting it right. This drives a make it happen mindset.

Entrepreneurial leaders rely on an effective support network. They devote time effort and energy listening to the wisdom of professional advice – this could be informal mentors, professional advisers, business coach, non-executive directors (NEDS). My experience is that business people who commit to self/business improvement perform better than those who don’t. Support around organizational development and structure, strategy, sales and marketing, performance management along with finance is highly sought after. Those who implement great advice benefit enormously!

Building a strong top team is crucial. Whist this may seem like a bit of a cliché, it’s very true but very difficult to put in place. Those leaders who balance managing and winning business with developing top team talent do go on to achieve great things. My research shows that many founding entrepreneurs agonize about finding, retaining and rewarding the right people to run their business. They fall in and out of love with the individuals they work with. Having the right seats filled around the boardroom table is probably the hardest thing for an entrepreneur to achieve. When they get it right there is no stopping them…

Stay close to what you do best but collaborate where necessary. Those entrepreneurs who build great companies focus on their core skills and competencies. Straying too far from the knitting can cause disruption and lack off management skills and expertise can place strain on a growing organisation. Those entrepreneurs who move into new space will outsource tasks that are not core business – these may include R & D, marketing, technology, IT and product development. An ability to collaborate and manage strategic partnerships is becoming an increasingly important competence of a high growth business and entrepreneurial leader. Win – win is the key to any alliance

This represents the first 5 of the new 10 critical success factors to building a high growth company. The next couple of blogs will focus on other emerging themes.

 

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Working “on” the business & not “in” it

18/07/2013

This is a topic I have blogged about for sometime. Creating space and time to think about where you are going is an important habit high growth entrepreneurs need to develop. As most of my blogs are based on years of observing what successful business people do, its always beneficial and good practice to draw upon research.

Taking “time out” is key to growth was the finding of a GrowthAccelerator  research study, interesting insight for anyone wanting to do bigger things with their business. Here is a summary of the findings:

Taking time out is the only way to grow

According to an online poll of 500 SME owners and decision makers, taking time out from the day to day running of your business to put a detailed strategy in place is the vital first step on the pathway to growth.  Those who have taken the time to plan say it has put them, on average, 10 months ahead of where they would have been without planning.

Some key findings of the research were:

60% of those surveyed said they spend less than two hours a week actually leading their company, spending the rest of their time doing day to day work

Of those who said they had paid for professional support, 77% believed their company had benefitted

Of those who said they had paid for professional advice, 69.6% were able to describe very clear business objectives, compared with just 30% of those who hadn’t received external support

Lack of time to strategise presents a common challenge across all sectors, but some emerge as being clearer on their precise objectives than others, with manufacturing and technology leading the way (66% and 66.7% respectively)

I believe those entrepreneurs who apply 20% of their time to thinking and the remaining 80% just doing, move forward much quicker than those who just can’t see the wood for the trees. This ratio is very important.

More details on the research are available at:

http://www.bmmagazine.co.uk/in-business/advice/17461/taking-time-out-of-your-business-is-the-only-way-to-grow-your-business

The old cliche of working on instead of in the business is very true for entrepreneurs with a big goal.


We need more mid sized businesses (MSBs)

10/07/2013

Most people are staggered by the fact that there are only 33,000 companies in the UK employing more than 50 people, they are commonly known as mid sized businesses (MSBs) – this is based on a total business stock of 4.8Million. MSBs produce a staggering 50% of GDP so they are extremely important to the UK economy. For many years the UK has looked to Germany for inspiration, the importance of the “Mittelstand” – highly focused export orientated innovative businesses that employ more than 50 people. They are wealth generators and underpin the economy. UK policy makers lament for more of these MSBs, yet the statistics show that 99% of UK business stock employ less than 49 people

So what is the challenge? Why don’t we have more entrepreneurs going for growth and aiming to bust the 50-employee target? My hypothesis, based solely on anecdote and experience is that starting from scratch and building a business of scale is one of the most difficult jobs on the world. It requires guts, vision, and determination, resilience coupled to a business model that makes commercial sense. As a company grows towards 50 employees, the hurdles become more complex:

  1. Maintaining sales momentum and ensuring sufficient profitable revenue keeps coming through to fuel growth is demanding
  2. Funding growth through profits becomes more challenging and often new funding lines need to be explored – PE, VC, IPO.
  3. Avoiding offers from acquisitive competitors who give founders a clear line of sight to the “beach”– freedom from the day-to-day grind of commerce becomes extremely attractive.
  4. The profile of the adviser capability changes significantly and very often a new breed of expensive professionals many of which use jargon to justify their fees turn up at the front door. Many of these I would not pay with peanuts and the majority could not run a bath never mind a business. Finding trusted advisers is a big challenge.
  5. A need to make the transition from entrepreneurial to corporate mindset is vital – the narrative around the boardroom table changes and processes and governance are vital to continued growth.
  6. The need for NEDs and wisdom from those who have been there and done it becomes a stimulant for the lonely founder.
  7. Organisational development and culture eats strategy for breakfast, period. Companies that don’t get this right invariably end up managing decline and mob mentality prevails. A unified team all pointing in the same direction is so important.

Public sector policy makers should not underestimate how difficult it is to grow a business to becoming an MSB. Mindset plays an important role as does being part of community of others who have done it; the reality is this network is very small. So what is the solution? We must observe best practice from MSB hot spots – Germany, West Coast of the US, Cambridge and other regions that have nurtured these ambitious companies. Lets hear the founders stories – who did they use for advice? How did they cope with raising finance? Who are their mentors and inspiration? How did they cope with challenges? How did they address uncertainty? Growing an MSB needs those who have done it to share their stories of how they made it. Experiential learning is how entrepreneurs learn best.


The Mindset Staircase – understanding how high growth entrepreneurs think

27/06/2013

So much of the work to date on high growth companies has focused on what I would refer to as the hard issues of business – strategy, management, incubation, raising finance, selling. It has also extended into regional economics, proximity to universities, sectors and clusters. This all features as valuable contribution to the debate, but high growth companies are started by human beings, individuals on a mission to win and do something pretty special. Often high growth is planned and sometimes it just happens, being in the right place at the right time. My experience has been the businesses that grow rapidly and create value are founded by individuals with “a special mindset and personal mission”. In 2010, my second book Success Factor was published, it brought together observational research around what I think the ingredients of the entrepreneurs winning mindset looks like. Now we are extending the research and working with the Centre for Enterprise at MMU, looking at more fundamental issues such as:

How does a high growth entrepreneur think?

Why do they go one step further than those who remain more modest in their ambition?

Why do they keep going when the odds are stacked against them?

Why do they keep going when others give up?

Why do they take risks others wont and very often risk their kids inheritance?

Research shows that the majority of UK business stock stays small, the economy needs more mid-sized businesses in order to create the jobs needed. My opinion is we must under stand the DNA of the mindset of successful high growth entrepreneurs in more detail. If we can model how they behave then we can teach it. It’s the missing piece of the business support agenda! Attached to this blog is the growth staircase, it shows the transition points of growth. My mission is to understand how the mindset of an entrepreneur affects the successful breaking of the inevitable glass ceilings the journey presents.

Growth Companies – Ability to climb the staircase    staircase diagram

Working with those individuals who have the right mindset will undoubtedly increase the odds of creating winning businesses.


It’s not all about high technology start-ups

12/06/2013

Throughout the world there is currently lots of hype about high growth technology start-ups. In the UK, accelerator programmes developed by successful US tech entrepreneurs have ignited interest in searching out the next Google or LinkedIn.  The craze of boot camps and lean start-up initiatives, designed to help the next global star get off the ground, have attracted the attention of the policy makers keen to identify the next big employer.

I am a big supporter of the start-up agenda; however saying we don’t need any more hairdressers or life style businesses is wrong! High technology starts ups are only part of the answer. There is so much potential in what I would refer to as the traditional industries of engineering, retailing and indeed construction. I was fortunate today to meet the founder and MD of what could at face value be termed a traditional business, but they are a construction company with a difference – they have grown to some £3M in less than three years and employ +20 of people. They have the secret ingredients of:

  • A strong brand and edge in the market place (innovation)
  • A passionate leader who is ambitious and keen to grow
  • Strong team
  • Delivering “off the scale” customer service
  • Looking after those who are important – staff, customers and suppliers
  • Strong financial management

They are not high technology, just a decent honest business led by an individual on a mission. High technology businesses are not the panacea for job creation, individuals who want to make a difference and who have a great idea are the ones who will drive the economy. They maybe very traditional in their offering but use enabling technology to drive growth. The Sunday Times Fast Track 100 is stacked with businesses that do normal stuff and include accountants and petrol stations, at face value not high-tech but embrace new technology to accelerate their growth and performance. Individuals who think differently run these companies. So if you run a chip shop, you could be the next Harry Ramsden, or maybe a hairdresser, Vidal Sassoon didn’t do so bad neither did Toni and Guy.


Sales Skills for Growth

05/06/2013

A re occurring theme and one I regularly blog about – high growth means being great at selling!

For many of the businesses I have worked with, recruiting and retaining high performing sales talent seems to be a constant challenge. I can recite many horror stories of businesses who have fell foul of the smooth talking sales person who in the job interview appeared to be a gift from heaven but rapidly turned into a missile of destruction – leaving a trail of bad feelings with customers, staff and other stakeholders. The resultant effect being senior management spending six months after their departure repairing the damage and groveling to customers in order to get the brand out of intensive care.

In the UK sales remains to be a taboo word that many professionals like to dissociate from, you would be amazed how many entrepreneurs I work with still feel uncomfortable with selling. It is a real problem and the truth is business growth means, “selling loads more stuff”. The fear of picking up the phone and the pedestrian approach to getting out and about, wearing down the shoe leather is a common inhibitor to accelerated performance.  The high growth businesses and successful start-ups I have come across have one common denominator (apart from a great product/idea) – they have a well-tuned sales engine and sales centric culture totally aligned to making the customer jump for joy. Winning businesses of the future will be the ones who can sell or at least have someone in the team who excels at selling. Whilst business strategy and all those other topics our fantastic management schools teach are important – personal and business growth happens only when a sales mindset is embraced.

In line with my observations on the paucity of sales skills and the urgent need for employers to access high performing talent, I will be launching a Sales Academy in autumn – an accredited sales qualification and a raft of related practical personal and organizational development tools will underpin the Academy. This new entity will bring to life the fact that great sales skills drive growth. It will become the incubator for the next generation of stars employers want on their payroll. It will also help those ambitious entrepreneurs to fine tune how they go about winning more new business.

Whilst traditional sales skills have their place, we also need a new breed of sales person, those who exhibit entrepreneurial flair and “sell from within”, they don’t hide behind the enablers of emails or social media. The enlightened sales person will: live in the customers world, have a great understanding of their employers strategy vision and values, articulate value with clarity, will recognize the mental imprint they leave with customers, exhibit passion & energy, be able to have a grown up conversation, walk away if its not right, exhibit creativity & innovation, build confidence and trust, demonstrate personal momentum, have a positive mental attitude, make doing business fun, cultivate their personal branding, recognize relationships are about win –win, caring, this list goes on.

It was great to meet with Jurek Sikorski this morning at London University Business School (LUBS), a successful life sciences entrepreneur who preaches all of the above and who’s mantra is successful business is down to selling, a statement of the obvious, however, the obvious is often very deceptive.  As a passionate ambassador for “sales”, it was a breath of fresh to hear that selling skills are embedded and taught within the LUBS entrepreneurship courses. It’s not dressed up as customer relationship management, business development, customer service or key account management – it’s about selling!

Jurek’s newly formed Sales Club at LUBS and the first Sales Academy in Manchester will have a lot to talk about going forward.


Fast tracking growth – go and see what great looks like

08/05/2013

The impact of business and personal progression is catalysed when entrepreneurs come together to see for real what excellence looks like. This was brought home to me last week when a group of our High Growth Foundation members assembled to discuss the impact their visit to Silicon Valley had had on their business. The outputs can only be describe as transformational, here are just a few of the comments made:

  • A “just try it” culture introduced has resulted in an increase of £2M in gross profit
  • By thinking big I have won more orders
  • Culture eats strategy every time – my competitors can’t copy my culture
  • Tactics now dictate my strategy – I just get on with it, amazing things happen
  • I am catching the next big market wave and driving the business in this direction, it’s working
  • I am spending more time on the business than in it – this makes things happen faster
  • The inspiration I gained has opened many new opportunities to improve and I am not just talking about it, I am getting on and doing it!
  • I have set up new businesses that are global from day one
  • Life has become easier because I now lead the business rather than get involved in the minuscule things that make no difference – more importantly I have worked out how to stand back and empower others
  • Looking after staff and culture comes first – this takes care of customers

The message I have taken from this community exchange is that entrepreneurs learn best when they are in environments that inspire. Management books, learning events, seminars and PowerPoint presentations on how to build a business plan are great….but, there is nothing more effective than experiencing for real, first hand, in the present, amazing business practice. The stories delegates listened to from founders in global companies like LinkedIn, delivered insights way above any management degree or business studies course. As one of the delegates from another trip to the West Coast said, I learned more from three days than I did from two years studying my MBA. Formal training in business and management without doubt helps us to learn the tools and techniques for growing a business. However, nothing takes the place of seeing “great in action”. This is where the learning really happens. (Having a coach or mentor helps to put what you have seen in action as well)

In a sort of related way it does prove the importance of training the next generation of entrepreneurs by getting them to become apprentices to those already running a business. The reality of what building a company feels like can only be fully understood when you are spinning the plates of customers, staff, finances, delivery, HMRC, the bank, suppliers, pipeline, writing quotations……..

So the messages are:

  • If you want to grow your business fast, get close to someone who has done it/doing it – Silicon Valley experience is a great learning journey
  • If you want to set up a business but are in fear of making the leap, go and spend a week with someone doing it
  • If you want to go global, get on a plane and get immersed in the market and the culture

There is nothing more powerful in business than being around other ambitious entrepreneurs just doing great things. These experiences of observing what great looks like helps to nudge the mindset into a new space, one that thinks bigger and one that is more open to innovation and new possibilities. The economy needs more people to think big, with only 32,000 businesses in the UK employing over 50 staff, we have a long way to go.

You can’t manage and grow your business sat at the desk……fast track your performance by being with doers, avoid the talkers like the plague.